Indonesia: As the Rest of the World Quits, Indonesia’s Smokers Increase

6 February 2018:

Indonesia famously is a country of smokers, with the world’s highest prevalence among males. More than two-thirds of males 15 years of age or older smoke, a story that has been written countless times. But what makes it alarming is that while smoking is decreasing across the world, it is actually increasing in Indonesia.

It is estimated that 200,000 people die annually from the effects of smoking. In 2013, the last year statistics are available, the Health Ministry estimated the loss to the country in illness, disability and premature death at Rp378.75 trillion (US$27.75 billion), according to the Health Ministry, resulting from lost productivity due to illness, disability and premature death in youth and medical expenses. Indonesia’s economy is also expected to lose Rp59,580 trillion (US$45 billion) by 2030 from tobacco-related diseases.

There is a good reason Indonesia is one of the few countries in the world and is the only WHO member state in Southeast Asia that has not ratified the Framework Convention on Tobacco Control. HM Sampoerna, now 92.5 percent owned by the New York-based tobacco giant Philip Morris, is one of the country’s 10 largest companies, controlling 35 percent of the country’s tobacco market. It distributes the Marlboro brand, the world’s best-selling cigarette, as well as Sampoerna Hijau, Sampoerna A Mild, and the legendary “King of Kretek” Dji Samsoe.

The second-largest tobacco manufacturer, also among Indonesia’s top 10 by market capitalization, is Gudang Garam, which controls some 20 percent of the market. This company is also positioned within the top 10 of largest listed companies in terms of market capitalization. Two other listed tobacco manufacturers are Bentel Internasional Investama and Wismilak Inti Makmur. Two non-listed cigarette manufacturers that play a significant role in the industry are Djarum and Nojorono. Together, the six control Indonesia’s tobacco and cigarette market. The industry employs millions of workers.

That kind of marketing power is an indication of the government’s lack of commitment to combating cigarette consumption. Not only is cigarette advertising not forbidden, the tobacco companies are often the main sponsors of national sports events. Educational scholarships from the tobacco companies were free to enter many institutions. Its kretek – clove-scented cigarettes – are famous well beyond Indonesia.

There is no minimum age limit to buy cigarettes in Indonesia. Shopkeepers will not ask for ID cards before they buy cigarettes. It is routine for children tell shopkeepers that adult relatives sent them to buy cigarettes.

Despite a 10.5 percent increase in tobacco excise taxes last September, a packet of 20 cigarettes in Indonesia is still the cheapest in the world, averaging US$1.40 per packet, according to the Dutch investment research firm Invest Indonesia. A lesser-known brand of cigars goes for as little as US$1 per pack. By contrast, in California, a packet of 20 cigarettes costs US$5.90. In China, the average price is RMB50 (US$7.90). Considering that the majority of poor Indonesians survive on less than £1.20 a day, that ought to mean cigarettes are unafordable for a major segment of the population. It is not true.

Widespread research indicates that many of the poor actually spend on cigarettes rather than food, sometimes choosing to go hungry rather than resisting the need to smoke. Cigars, the second largest household expenditure, take up as much as 15 percent of the total budget per month. In fact, the poor spend an average six times more on tobacco than on dairy and egg products.

Shop owners get creative as well, usually selling cigarettes by the stick at a cost as little as 7 US cents. Young smokers can afford to use their lunch money. Thus in 2016 more than 316 billion cigarettes were sold in Indonesia.

More effort needed

Despite the horrendous cost of smoking, the administration of President Joko Widodo has done little despite the rise in excise taxes. The administration earlier issued a roadmap that sought to triple cigarette production to 524 billion by 202. However, last March, Jokowi, as the President is universally known, issued a statement saying it wouldn’t debate the bill. Without a letter from the administration, called a supres, debate can’t begin.

The decision to not support the bill, however, is hardly a serious attempt to reduce smoking. While other countries – particularly China, the United States and others – have carried out campaigns to publicize the risk of smoking and raised prices to prohibitive levels, Indonesia has done almost nothing, preferring to not antagonize an industry that provides so much employment and whose corporate interests are so powerful.

If smoking is to be curbed, prices need to be raised dramatically. According to a study by Universitas Indonesia’s Public Health Faculty, 72 percent of Indonesians over the age of 15 said they would quit if the price rose to Rp50,000 (US$3.68 per pack). Massive campaigns and socializations on the dangers of smoking need to be carried out in schools, universities, media, and other public places.

Cigarette companies should not be allowed to place advertisements in public places or media channels, let alone sponsoring events at academic institutions. Indeed, the government must have strict regulations towards these companies if they would like to see their future generations survive. In Australia, all branding is eliminated and replaced by bold lettering saying cigarettes cause cancer, for instance.

Today cigarettes are sold besides lollipops at small grocery stores and sari-sari shops, hardly an incentive to smokers to quit

Surely, strong and radical efforts must be carried out by the Indonesian government in order to make sure that its future generations are healthy, knowledgeable, and capable of handling the affairs of the country. But given the power of the industry, that is not immediately likely.